Senator takes on insurers' tactics

WASHINGTON -- Ever wonder how your bill was calculated if you had to pay to see a doctor outside your insurance network?

WASHINGTON -- Ever wonder how your bill was calculated if you had to pay to see a doctor outside your insurance network?

Sen. Jay Rockefeller, chairman of the Senate Commerce, Science and Transportation Committee, wants answers at a hearing Tuesday from the chief executives of UnitedHealth Group Inc. and its subsidiary Ingenix Inc., a claims database used by insurers nationwide to calculate out-of-network rates.

The inquiry follows lawsuits and an investigation by New York Attorney General Andrew Cuomo alleging that UnitedHealth and Ingenix manipulated rate data so that insurers had to pay less and patients more for out-of-network services.

"They're lowballing deliberately. They deliberately cut the numbers so the consumer has to pay more of the cost," Rockefeller, D-W.Va., said. "It's fraud."

In January, UnitedHealth agreed to pay $350 million to settle a suit by the American Medical Association and others over the issue. UnitedHealth did not admit wrongdoing.

But, under pressure from Cuomo, the company agreed to pay $50 million toward creation of an independent claims database and eventually close down the Ingenix databases.

Cuomo has secured similar agreements from other major insurers, including WellPoint Inc., Aetna Inc. and Cigna Corp. The AMA is pursuing suits against those companies, too.

More than 70 percent of workers who get health care through their employers are enrolled in plans that allow them to go out of network, according to the Kaiser Family Foundation. Typically, those plans will pay a set percentage, say 70 percent, for an out-of-network visit.

But unknown to many consumers, when patients go out of network, their plan doesn't actually pay 70 percent of the cost. It pays 70 percent of what it determines is the "usual, customary and reasonable" cost for the procedure or doctor's visit in question.

Insurance companies determine that cost themselves or use figures from a database of their choosing, and there's scant regulation or oversight of how they do it.

In the case of UnitedHealth and Ingenix, they were allegedly manipulating claims data so that the "usual, customary and reasonable" costs they used were lower than they should have been, leaving patients to pay more.

A spokesman for the insurance-industry group America's Health Insurance Plans blamed doctors for high out-of-network bills.

"Consumers would be shocked if they knew the exorbitant rates that some nonparticipating providers charge," Robert Zirkelbach said.